Question

At the beginning of the year (January 1), Buffalo Drilling has $10,000 of common stock outstanding and retained earnings of $7,000. During the year, Buffalo reports net income of $7,300 and pays dividends of $2,000. In addition, Buffalo issues additional common stock for $6,800.Prepare the statement of Shareholer'sequity in the end of the year.

Answer 1

Shareholders Equity

INITIAL Shareholders Equity $ 17.000

Common Stock $ 6.800

Retained Earnings $ 5.300

FINAL Shareholders Equity $ 29.100

Step-by-step explanation:

Retained Earnings Report

Opening retained earnings $ 7,000

Add: Net Income $ 7,300

Subtotal $ 14,300

Less: Dividens -$ 2,000

Total $ 12,300

Stockholders' Equity INITIAL FINAL

Common Stock $ 10,000 $ 16,800

Retained Earnings $ 7,000 $ 12,300

TOTAL EQUITY $ 17,000 $ 29,100